5. Outline of discussion:

(1) Opening remarks by Mr. Minorikawa

Japan is to hold the Fifth Pacific Islands Leaders Meeting (PALM 5) in Tomamu, Hokkaido in May, 2009. This Expert Committee is to prepare for PALM 5 by reviewing Okinawa Partnership announced at PALM4 and, based on that review, discussing the way forward of Japanese assistance for the Pacific Islands.

Japan hosted the first PALM about ten years ago in 1997. Since then, PALM has been held every three years, with a view to contributing to this region's development.

Japan's ODA to this region, which plays the pivotal role in Japan's assistance to this region, has been slightly more than one percent of the total bilateral ODA that has been decreasing in recent years due to severe ODA budget constraint.

On the other hand, other donor countries have been strengthening their assistance to the Pacific islands.
Although Japan's presence is well recognized, we are concerned that Japan's presence in this region might be comparatively diminishing in recent years.

Japan, a friend of the Pacific islands, has been working with them on various issues such as climate change and sustainable development, sharing the same point of view with these Pacific nations. After ten years from the first PALM, what we should think about now is strategies and visions for the forthcoming ten years. I would like to hear opinions from various perspectives on how Japan can assist and engage with this region. In this regard, this committee consists of not only experts that are familiar with this region but also opinion leaders of various fields such as non-government sector and economic and academic circles. I would like to ask each member to work together and make meaningful proposals by next March, which will lead to making PALM5 a milestone in the history of Japan-PIF relations.

(2) Appointment of the chairperson

Mr. Kobayashi was appointed as the chairman with the approval of all the committee members.

(3) Opening remarks by the chair

It has been ten years since the Pacific Islands Leaders Meeting was established and is time to consider how it should be in the future, including its venue. We are here to consider our vision for the next ten years towards the Pacific region, as it seems to me that the past PALMs have worked out every sort of idea of assistance. Our discussion should be based on the evaluation of the past PALMs.

It is important, when we discuss assistance for the Pacific islands, that we make sure that our assistance should not be regarded by these island countries as intrusive and forcible. Japan's assistance has been viewed as different from those by former colonizers and thus highly appreciated by the island countries. In fact, China is taking this advantage and giving assistance to this region with the south-to-south assistance approach. ODA being a diplomatic tool, we should be aware of this situation.

(4) Presentation by the Ministry of Foreign Affairs

Mr. Kohara, following up on the opening remarks by Mr. Minorikawa, explained on Japan's foreign policy towards the Pacific region, the history of PALMs and the current situations of the Pacific islands.

As for future assistance, he brought up priority areas such as climate change, sustainable development as well as people-to-people exchange and human development, taking into consideration diplomatic importance of this region and Pacific islands' needs represented in the Pacific Plan. He also noted that the aforementioned priority areas are not at all final and yet to be considered in this Committee.

(5) Free discussion by the committee members

(a) Comments on current Japan's assistance to the Pacific islands

According to our survey, Japan's assistance toward this region, in general, is highly appreciated, although there is still room to improve. My impression is that this is because Japan's aid is mainly through visible projects and Japan Overseas Cooperation Volunteers (JOCV).

Japan, under the severe budget constraint, has worked out various assistance methods such as region-wide assistance and cooperation with NGOs to enhance assistance effectiveness. I think this could be applied to other regions as good practices. However, Japan's ODA to this region is only one percent of its total bilateral ODA. This figure seems too small compared with ODA towards other regions, in light of this region's diplomatic importance to Japan. This percentage has decreased too severely even considering the decrease of overall ODA. If this situation is allowed to persist in the future, it may result in the misunderstanding that Japan is putting little importance to this region. As Japan is seen by the region through the PALM process that it attaches diplomatic importance to the region, Japan should endeavor to restore the ODA to this region to 1.7%, that is to say, to double its ODA towards this region, thus sending clear message to the region that this region is regarded as important by Japan.

Some facilities by Japan's ODA are not fully utilized.

(b) Advice for future Japanese assistance

What is important for the way forward is the evaluation of the past PALMs and annual reviews of commitments made at the past PALMs. It seems that some Pacific islands are too dependent on aid. This makes it difficult for them to become independent of aid. Future assistance planning requires examining the real needs of the island nations.

Putting priority to people-to-people exchange in the future assistance is a good idea. People-to-people exchange and Human development are the foundation of all sorts of assistance, and help create ownership on the side of the developing countries. In this sense, the current development of ASEAN nations is a result of Japanese ODA. When I see showy buildings by other donors, I see their self-admiration.

To protect the environment, environmental education is essential. Projects and facilities with this regard are recommended. It is proposed that assistance be undertaken that will be truly appreciated by the recipient island countries such as water quality control and waste management in combination with human development.

Some people in the recipient countries say that they do not really appreciate assistance by China, but we should not take their comments at their face value. They are used to receiving aid, so they may say to Japan that Japan's ODA is really good, but they may be saying to China that China's aid is truly appreciated. Furthermore, the quality of assistance by China is not necessarily bad. According to some businesspersons of Japanese companies operating in Africa, 95 percent of roads in Africa are constructed by Chinese companies and their work meets the international standard.

(c) Questions addressed to the Ministry of Foreign Affairs

How does the Ministry evaluate the last four PALMs and how will that evaluation lead to PALM 5?

Which fields does Japan plan to select and focus on for future assistance, considering Japan's past achievements and fortes in aid? More specifically, what is the reason that the list of priority fields shown earlier was missing education and health that Japan actively promoted at the last PALMs? Furthermore, how do the priority areas respond to the eleven areas presented in the recent PIF Summit Communiqué?

At PALM 4, it was decided that reviews of the Okinawa Partnership would be carried out by Japan-PIF Joint Committee on a regular basis. How is it being undertaken?

What kind of assistance do other donors give to this region, especially China and Taiwan? How about World Bank and Asia Development Bank?

In assisting this region, how is Japan coordinating with Australia and New Zealand which take different aid approach from Japan?

How has Japan been prioritizing assistance areas for the island nations? Are there specific fields in which ODA is utilized more than others? For instance, is there any area of assistance that Japan focuses on, thus the decrease rate of which has not been as sharp as that of other fields?

The governance of this region needs to be investigated in detail. What is the reason that governance is not included as a priority area of assistance? How important is this region to Japan in Japan's diplomacy?

(6) Response by the Ministry of Foreign Affairs to the questions raised above

The priority fields that the Ministry presented earlier are not at all final and yet to be discussed in this Committee.

Answers to the questions raised today shall be given at the next meeting, where the Ministry will also give explanation as to the implementation status of the Okinawa Partnership.

In order to increase overall ODA for this region, the use of loans needs to be discussed. However, it should also be considered whether or not the Pacific island nations are capable of using such loans.

The reason that the percentage of ODA to the Pacific islands has decreased in the past few years is twofold. One is that there arouse needs to provide urgent assistance to countries such as Iraq and Afghanistan. The other is due to our diplomatic policy such as increase of aid to Africa. We have been endeavoring since last fiscal year to prepare projects in order to increase our aid achievements to this region, complying with the commitment made at the last PALM.